HMRC is working towards its ambition of becoming one of the most digitally advanced tax administrations in the world by ‘Making Tax Digital’ (MTD). MTD was announced back in 2016 when the Government published six consultations setting out the key thinking behind their plans.
At the heart of the initiative are four key foundations:
- Better use of information – the concept being individuals and businesses will never again have to give HMRC information it already has.
- Tax in real time – no one should have to wait until the end of the year to know how much they owe in tax.
- A single financial account – By 2020 individuals and businesses will be able to see a comprehensive financial picture in their digital HMRC account.
- Interacting digitally with customers – we will all be able to interact with HMRC digitally with prompts, advice ad support through webchat and secure messaging.
HMRC have started piloting MTD for VAT allowing for plenty of testing time before businesses are mandated to use the system. From April 2019 businesses above the VAT threshold will be expected to keep their records digitally and provide quarterly updates to HMRC for their VAT.
HMRC are working in close partnership with the software industry to ensure successful implementation of ‘Making Tax Digital’. Select Legal Systems Limited is ahead of the game as usual . Team LAWFUSION is currently busy finalising its MTD screen designs and specifications and phase one testing will begin September time.
Law firms will be able to file their VAT returns straight to HMRC via LAWFUSION in time for the April 2019 deadline.